UNIT I: NATURE AND SCOPE OF THE NEW GOVERNMENT

ACCOUNTING SYSTEM (NGAS)

ASSESSMENT

1. Under Section 109, of the Presidential Decree (PD) no. 1445, defines Government
Accounting as one that encompasses the process of analyzing, classifying, summarizing and
communicating all transactions that are involved in the receipt and disbursement of all
government funds and properties, and interpreting the results thereof. In pursuant to this
definition, objectives were set to cover several areas in government operations.

2. The need for timely preparation of financial reports in government is necessary to evaluate
the performance of the different agencies of government. The result of the reports would
indicate the areas that may still need improvement, as well as come up with the budgetary
requirements for these agencies if needed.

The shift to NGAs was made in response to the following need:

a) Adoption of an accounting system that is in conformity with the International
Accounting Standards.

b) Computerization of the accounting systems to generate reports that will be easy to

understand by the general public.

c) Preparation of regular and routinary financial reports.

d) The use of the generated financial reports as tools of management in decision making.

3. A. Commission on Audit
The consistency of account classification and coding structure with the Revised Chart of
Accounts shall be the responsibility of COA.
B. Department of Budget and Management
The responsibility of DBM is the validation and assignment of new codes for funding
source, organization, sub-object codes for expenditure items.
 C. Bureau of Treasury
The consistency of account classification and coding standards with the Government
Finance Statistics shall be the responsibility of DOF-BTr.
D. National Government Agencies
National government agencies are basically cost centers, whose primary purpose is to
render service to the public at the lowest possible cost. Cost centers are established to
provide each government agency’s accessibility to cost information and to facilitate cost
monitoring at any given period.

4. Responsibility accounting aims to: a) ensure that all costs and revenues are properly
charged/credited to the correct responsibility center so that deviations from the budget can
be readily attributed to managers accountable therefore: b) provide a basis for making
decisions for future operations; and c) facilitate review activities, monitoring the
performance of each responsibility center and evaluation of the effectiveness of agency's
operations.

5. A. Allotment – commonly refers to the allocation of shares granted to a participating

underwriting firm during an initial public offering (IPO). In business, allotment describes a
systematic distribution of resources across different entities and over time.
B. Obligation – Liabilities legally incurred and committed to be paid for by the government
either immediately or in the future. In financial accounting, a liability is defined as
an obligation of an entity arising from past transactions or events, the settlement of which
may result in the transfer or use of assets, provision of services or other yielding of economic
benefits in the future.
C. Notice of Cash Allocation – Cash authority issued quarterly by the DBM to central,
regional and provincial offices and operating units to cover the cash requirements of the
agencies.